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Statistics & Researc h Boosting Portrolio Yield by Controlling Skip Tracing Cost Stephen Williams MDG Capital Irvine CA (The full paper had not been received at the time of the printing of the proceedings.) Abstract Statement of the Situation The yield from a receivables portfolio can deteriorate seriously due to the cost of skip tracing on past due accounts. The two major variable costs associated with recoveries are data costs and labor costs, with labor being at least 75% of the total skip tracing costs. Solution We have developed a series of scoring models that predict the probability of locating a skipped debtor and the probability of recovering on the debt. The data necessary for scoring the debt is located in a number of databases. No one database was sufficient to make a g.xxi prediction. Methodology No single model could be used to predict either locatability or recovery probability. Cluster analysis was used to define sub-populations that could be modeled further. Sub-populations were defined according to the type of data and amount of data available. Models were constructed using both linear and non-linear regression. 273 \WSS95